Chilling Effect

Those two, who were so worked up over the "censorship" and "chilling effect" and "erosion of constitutional freedoms" of David Koch deciding to come off the board of WNET and reconsider a gift after the public television station aired a documentary viciously attacking him and other residents of a building on Park Avenue and blaming them for poverty in America, have yet to be heard from when it comes to the American Federation of Teachers campaign against money managers who back research organizations critical of public pension funds.

I've been dismissive of the concerns about Koch, partly because I don't think anyone should be forced to pay for vicious attacks on himself, and partly because I don't think there's any shortage of Koch criticism elsewhere. But if one is going to be alarmed about Koch, then one should be even more concerned about the AFT's bullying campaign, because it's a kind of second-level bullying campaign. No one is saying that the AFT should be forced to fund the Manhattan Institute or any other conservative think tank, which would be the analogy to David Koch funding WNET. But what appears to be happening is that the AFT is highlighting money managers who, as individuals, support certain causes, and at least implicitly threatening to take business away from the businesses of those individuals as punishment. So where's the "support free speech against powerful intimidating forces" crowd when you need them?

It makes one wonder if Ms. Mayer and Mr. Cohan aren't just against money-based intimidation on some kind of broader principle (if they were, they'd be against it when the AFT did it as well as when Mr. Koch did it, though again, I don't think the matters are exactly the same, just similar in some ways), but just against the Koch brothers.

On the larger point, today's New York Post report that "Money management heavy hitters Cliff Asness, Henry Kravis, and Thomas McWilliams...are cutting their ties to the Manhattan Institute" in response to the AFT's pressure campaign is a reminder of one of the drawbacks of what we have called State-Pension Fund Capitalism, which is the unfortunate effect it can sometimes have on people who otherwise might be outspoken leaders of the free-market cause. See for example, the case of Blackstone and Byron Wien.

Mr. Asness declined to comment to FutureOfCapitalism, though the article makes clear he is not resigning immediately from the Manhattan Institute board. I have a call in to the Manhattan Institute and intend to update this post after I hear back from the person they want me to talk to there.

The president of the American Federation of Teachers, Randi Weingarten, tweeted, "Because of our push 4 transparency 3 hedge fund managers are pulling out of anti-union groups. We thank them."